August 16, 2017/Cordros Research

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EQUITIES

• The equities market recorded loss for the third consecutive session as investors took profit, causing the ASI to drop 2.68% – the largest loss recorded in the month – to 36,102.38 points.

• Today’s performance increased the Week-to-Date loss to 5.49% and dropped the Month-to-Date and Year-to-Date returns to 0.72% and 34.34%, respectively.

• The market recorded losses across board with the Industrial Goods (-3.11%) index recording the largest loss, followed by the Banking (-2.84%), Oil & Gas (-0.97%), Consumer Goods (-0.96%) and Insurance (-0.08%) indices. The sector-wide losses were attributable to investors’ profit taking in the shares of DANGCEM (-4.89%), WAPCO (-1.68%), GUARANTY (-4.68%), ZENITHBANK (-3.27%), TOTAL (-4.04%), FO (-2.91%), NB (-2.63%) and GUINNESS (-2.15%) shares, respectively.

• Market breadth remained negative with 10 losers and 31 gainers. The total volume of shares traded reduced by 42.60% to 224 million shares, valued at N5.09 billion, and exchanged in 4,822 deals.

• We expect the market to close lower as investors continue to take profit on previous gains.

CURRENCY

• Yesterday, the apex bank injected USD364 million into the FX market – comprising USD264 million to the Retail Secondary Market Intervention Sales (SMIS) and USD100 million in the wholesale window. At the time of writing, the CBN’s referenced USD/NGN closed flat at N305.65. Meanwhile, the Bloomberg’s referenced USD/NGN (+1.13%) and EUR/NGN (+0.28%) strengthened to N361.91 and N425.43, respectively, while the GBP/NGN (-0.03%) weakened to N467.78. In the parallel market, the LCY closed flat against all the currencies we track, – USD, GBP, and EUR – respectively closing at N370, N477 and N432. In the I&E FX window, the FMDQ’s referenced USD/NGN (+0.74%) appreciated to N359.69.

FIXED INCOME AND MONEY MARKET

• The overnight market rate contracted  by 683 bps to 22.42% following the anticipation of OMO bills maturing tomorrow, valued at N168.04 billion.

• The bulls resurfaced in the treasury bills market, with average yield contracting by 13 bps to 18.62%. Yields at the short (-36 bps) and mid (-16 bps) ends of the curve contracted to 18.34% and 18.98% as investors demanded for the 24-AUG-2017 (-107 bps) and 16-NOV-2017 (-108 bps) bills respectively. Conversely, snippets of sell offs ensued at the long (+2 bps) end of the curve driven by sale of the 15-Mar-2018(+ 34 bps) bill. The result of today’s NTB auction was unavailable at the time of writing. 

• Similarly, investors were broadly bullish in the bonds market, with average yield contracting by 9 bps to 16.48%. Yields at the short (-20 bps), mid (-13 bps) and long (-6 bps) ends of the curve contracted, following investors’ interests in the 29-JUNE-2019(-20 bps), 15-JULY-2021(-16 bps) and 22-JAN-2026(-10 bps) bonds respectively.

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